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NMIMS
Global Access
School
for Continuing Education (NGA-SCE)
Course:
International Banking & Foreign Exchange Management
Internal Assignment Applicable for June 2024
Examination
Assignment Marks: 30
1 Suppose that your friend Mr. Naresh is
expanding his business by starting a new export venture. He has seeked your
advice in the matter. Explain to him how the EXIM bank can help him and discuss
their programs and services that could be useful for Mr. Naresh. (10 marks)
Answer: Mr. Naresh's decision to expand his business through a new export
venture is a commendable step towards growth and diversification. Exploring the
services and programs offered by the Export-Import Bank of India (EXIM Bank)
can significantly benefit his venture. Here's how EXIM Bank can assist Mr.
Naresh and an overview of its programs and services:
- Export Finance: EXIM
Bank provides various financing options tailored to meet the needs of
exporters. These include pre-shipment and post-shipment finance, export
credit lines, and buyer's credit. Such financial assistance can help Mr.
Naresh manage working capital requirements, fulfill export orders, and
expand his export operations.
- Export Credit Insurance: EXIM
Bank offers export credit insurance to protect exporters against
non-payment risks arising from commercial and political factors. This
insurance coverage can safeguard Mr. Naresh's export receivables, enabling
him to explore new markets with confidence while mitigating credit risks.
2. Dr. Swami
is part of the management team of MHS bank that is performing very well in the
domestic market of its country. Advisors have suggested them to consider
expansion in foreign countries as well. What can be the advantages of such an
approach? What kind of services can the bank aim to provide by
‘internationalisation’ of the bank? (10 Marks)
Answer: Expanding into foreign markets can offer several
advantages for MHS Bank, especially if it's already performing well in its
domestic market. Here are the potential benefits of such an approach:
- Diversification
of Revenue Streams: By expanding
internationally, MHS Bank can reduce its reliance on any single market or
economy. This diversification can help mitigate risks associated with
economic downturns or regulatory changes in the domestic market.
- Access to New
Customer Base:
International expansion provides MHS Bank with access to a larger customer
base, allowing it to tap into new sources of revenue. Serving customers in
foreign markets can lead to increased profitability and growth
opportunities.
- Brand
Enhancement and Global Recognition: Establishing a presence in foreign countries
can enhance MHS Bank's brand reputation and visibility on a global scale.
This can help attract new customers, partners, and investors, while also
reinforcing credibility and trust in the international financial
community.
3. a. Over
the past few years India has attracted a large amount of Foreign Direct
Investment (FDI) in various sectors. Explain what you mean by FDI with an
example. (5 marks)
Answer: Foreign Direct Investment (FDI) refers to the investment
made by a company or individual from one country into business interests
located in another country, with the intent of establishing a lasting interest
or control in the foreign business. FDI involves the direct ownership of assets
in the foreign country, such as factories, land, buildings, or stakes in local companies.
For example, let's consider a multinational technology company
based in the United States,
b. The Euro
as a common currency for the European Union’s member states was launched with
the aim of greater European Integration. Do you agree that Euro as a single
currency has advantages? Discuss. (5 Marks)
Answer: Yes, the Euro as a single currency for the European Union
(EU) member states has several advantages, contributing to greater European
integration. Here are some key points to consider:
- Facilitation of Trade and Economic
Integration: The Euro eliminates currency exchange
costs and uncertainties within the Eurozone, making trade and economic transactions
smoother and more efficient. Businesses can conduct cross-border trade
without worrying about currency fluctuations or exchange rate risks,
promoting economic integration and fostering intra-EU trade.
- Price Transparency and Market Efficiency: With a
single currency, consumers and businesses benefit from increased price
transparency across the Eurozone. Prices of goods and services can be
easily compared between countries, leading to greater market efficiency,
competition, and consumer welfare. This transparency encourages businesses
to offer competitive prices and fosters a more integrated European market.
Dear students, get fully solved assignments by professionals
Do send your query at :
or call us at : 08263069601
(Plagiarism proofed assignments available with
100% surety and refund)
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